Nissan profits plunge on slumping sales, rising costs

Nissan motor company's profits plunged 14% in the latest quarter as US and European sales fell sharply and raw material costs rose.

Net profit in the April-June period fell to 115.8-billion yen ($1.05-billion), down from 134.9 billion yen in the same quarter last year, the Japanese automaker said Thursday.

Raw material costs climbing

Sales fell 1.6% globally to 2.72-trillion yen ($24.6-billion).

Vehicles sales slumped 9.5% in the US to 365 000 units, and fell 12.7% in Europe to 162 000 units. Those declines were partially offset by a 6.9% rise in sales in China to 336 000 units. Overall, global sales dropped 3% to 1.3-million units.

Exchange rate movements also hurt financial results, the company said.

Despite the weak performance, Nissan maintained its forecast for an annual profit of 500-billion yen and sales of 12-trillion yen for the year ending March 31, 2019.

Corporate Vice President Joji Tagawa said the company expects results to improve in the second half of the year with the launch of new models in the US, but he cautioned that raw material costs may have a bigger impact on profits than initially forecast.

He told reporters at Nissan headquarters in Yokohama that the impact of US steel and aluminum tariffs has been limited so far, because the company buys most of those materials in the United States.